Autumn Budget 2025: What It Means for Business Energy (And What It Didn't Address)
Autumn Budget 2025 What It Means for Business Energy
Household levies cut, but business cost increases still coming
Rachel Reeves' Autumn Budget focused energy measures on household bills, cutting green levies by around £130 per year. But for businesses, the bigger picture is what wasn't addressed: the Nuclear RAB Levy and TNUoS increases are still coming. Here's what you need to know.
The Quick Answer for Businesses
The headline energy measures in this Budget target households, not businesses. The levy reductions apply to domestic bills. However, the wholesale market outlook has improved since March, which is positive for business contract renewals. The regulatory cost increases we've been warning about – Nuclear RAB Levy and TNUoS standing charges – weren't addressed and are still coming.
✅ What Changed: Household Energy Measures
The Chancellor announced cuts to green levies on household energy bills. While these primarily affect domestic customers, understanding the changes gives context to the broader energy policy direction.
🏠 Energy Company Obligation (ECO) Scrapped
The ECO levy is being removed from April 2026. This currently adds around £43 per year to the average domestic bill. The scheme funded energy efficiency measures for vulnerable households.
♻️ Renewables Obligation Part-Funded
The Treasury will temporarily cover part of the Renewables Obligation levy, saving households around £90 per year. This costs £3bn next year, then £2bn annually until 2028/29.
💡 What This Means
The OBR forecasts these measures will reduce CPI inflation by 0.3 percentage points in 2026. The Government has chosen to fund these levies from general taxation rather than through energy bills – a shift in how clean energy transition costs are distributed.
⚠️ What Wasn't Addressed: Business Cost Increases Still Coming
For businesses, the more significant news is what the Budget didn't change. Two major regulatory cost increases are still on track, and they'll affect your energy bills regardless of which supplier you're with or what contract rate you've secured.
Regulatory Cost Increases Confirmed
The Budget was silent on these upcoming changes. They remain scheduled as previously announced and will add to business energy costs from late 2025 into 2026.
Nuclear RAB Levy Begins
The new Regulated Asset Base levy to fund Sizewell C nuclear plant starts appearing on business energy bills. This is a new standing charge that funds nuclear infrastructure investment and cannot be avoided through contract negotiations.
TNUoS Standing Charge Increases
Transmission Network Use of System charges are increasing significantly – up to 94% in some regions. These network charges are passed through on all contracts and vary by location. Businesses in certain areas will see substantial increases to their standing charges.
Why This Matters for Your Business
These regulatory charges sit outside your contracted unit rate. Even if you've locked in a competitive rate, these additional costs will increase your overall bill. The impact varies by:
- Location – TNUoS varies significantly by region
- Consumption profile – How charges are allocated to your meter
- Contract type – Pass-through vs. fully fixed arrangements
📈 The Good News: Wholesale Market Outlook
The OBR's November forecast brings some positive news for businesses looking at contract renewals. Wholesale energy prices have fallen significantly since the March forecast, which should feed through to better rates for businesses negotiating new contracts.
📊 OBR Wholesale Price Forecasts
Wholesale gas prices are expected to average 78 pence per therm across the forecast period – almost 20% lower than March projections. Electricity prices average £76 per megawatt hour, down 7% from March. These improved wholesale conditions create opportunities for businesses renewing contracts now.
🎯 What Businesses Should Do Now
Recommended Actions
Review Your Contract End Date
With wholesale prices down and regulatory increases coming, timing matters. If your contract ends in the next 6 months, now is a sensible time to explore renewal options before April 2026 TNUoS increases land.
Check Your Out-of-Contract Status
Businesses on out-of-contract rates are paying significantly above market rates. The improved wholesale outlook makes switching to a fixed contract even more valuable now.
Understand Your Pass-Through Charges
Ask your broker or supplier to explain how regulatory charges are handled in your contract. A kVA review can also identify if you're paying more than necessary on capacity charges.
Get a Transparent Comparison
With broker regulation coming , transparency matters more than ever. Work with a broker who clearly explains all costs – not just the headline rate.
📋 Beyond Energy: Other Budget Measures Affecting Businesses
While the energy-specific measures primarily targeted households, the wider Budget contains several changes that will affect business costs and cash flow over the coming years. With pressure building from multiple directions, controlling the costs you can influence becomes even more important.
📉 Income Tax Thresholds Frozen
Personal tax thresholds frozen until 2030-31. More employees dragged into higher tax brackets, increasing pressure on wage negotiations and take-home pay expectations.
💼 NI on Pension Salary Sacrifice
From 2029, employers will pay National Insurance on salary-sacrificed pension contributions – currently exempt. Additional employment cost to factor in.
📊 Dividend Tax Up 2%
Dividend tax rates increasing by 2 percentage points. Affects business owners and directors who take income through dividends.
🚗 New EV Mileage Charge
From April 2028, electric and plug-in hybrid vehicles face a new mileage-based charge at roughly half the fuel duty rate. Affects businesses with EV fleets.
⛽ Fuel Duty Frozen
Fuel duty rates frozen until September 2026. Keeps transport and fleet costs stable for businesses relying on petrol and diesel vehicles.
🏢 Corporation Tax Held
Main rate stays at 25%, small profits rate at 19%. Full expensing (100% first-year capital allowances) also maintained as promised.
💡 The Bottom Line
With costs rising across employment, dividends, and future fleet expenses, controlling the costs you can manage is vital. Energy is one area where shopping around and timing your renewal right can make a real difference – especially with wholesale prices currently favourable and regulatory increases on the horizon.
Control the Costs You Can
With business costs rising across multiple areas, making sure you're on the best energy rates is one thing you can control. We compare 28+ suppliers with transparent pricing – no hidden commissions, no pressure.
❓ Budget 2025 Energy FAQs
The headline energy measures target household bills through levy reductions, not business energy directly. Business prices are more influenced by wholesale market movements (which have improved) and upcoming regulatory changes like the Nuclear RAB Levy and TNUoS increases, which weren't addressed in the Budget.
The Energy Company Obligation (ECO) is being scrapped from April 2026, saving around £43 per year. The Renewables Obligation will be partly funded by the Treasury, saving around £90 per year. Combined household savings are approximately £130. VAT on energy remains at 5%.
The Regulated Asset Base levy is a new charge funding the Sizewell C nuclear power station. It appears as a standing charge on energy bills from November 2025. This charge applies to both domestic and business customers and cannot be avoided through contract negotiations – it's a regulatory cost passed through on all supplies.
TNUoS (Transmission Network Use of System) standing charge increases vary significantly by region, with some areas seeing increases of up to 94%. The exact impact depends on your location and consumption profile. These network charges are passed through on all contracts and represent a significant cost increase for many businesses.
The wholesale market outlook has improved since March, with gas prices down around 20% and electricity down 7%. With regulatory cost increases scheduled for November 2025 and April 2026, businesses with contracts ending soon should consider reviewing their options. A transparent comparison across suppliers can help identify the best value.
Ofgem regulation of energy brokers is coming from 2026. This will require transparent pricing and eliminate hidden commissions. Smart Energy Company already operates to these standards with our transparent pricing approach and 100% five-star Trustpilot rating. Regulation will protect businesses from less scrupulous operators.
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